Ola confirms $400M in fresh funding to expand into smaller Indian cities

India’s homegrown on-demand cab service giant Ola has raised US$400 million in funding, the startup revealed today. The investment is led by DST Global with participation from GIC, Falcon Edge Capital and existing investors SoftBank Group, Tiger Global, Steadview Capital and Accel Partners.

Last week, Ola revealed to the country’s Registrar of Companies (RoC) that it had raised $315 million in series E round. Today’s confirmation shows the investment was even larger than that.

With this, Ola has raised over US$600 million in order to grow the company and keep ahead of Uber. About six months ago, Ola secured US$210 million in its series D round led by Japanese internet and telecom giant SoftBank. Prior to that, it nabbed US$41.8 million in series C cash led by Hong Kong-based hedge fund manager Steadview Capital and Silicon Valley-based Sequoia Capital.

Four wheels, three wheels

Ola has expanded to 100 cities in the current year from 10 cities a year ago and added taxis and auto-rickshaws to the portfolio. Initially, the firm only aggregated cabs.

The company acquired homegrown rival TaxiForSure for US$200 million and is running the former rival as a standalone service. About US$100 million is earmarked for TaxiForSure’s expansion.

The additional investment will be used to go deeper into smaller cities and cross the 200 cities mark this year. In India, the smaller cities have very limited transportation options. We have contacted Ola for further details.

As part of its vertical expansion, Ola recently started instant food delivery with OlaCafé, currently available in beta across four cities.

Seeking more female drivers

While the app-connected transportation segment that Uber and Ola are battling over is worth hundreds of millions of dollars in revenues, it is also likely to help drivers in small towns across India to turn into entrepreneurs, creating lasting social and economic impact.

Ola will also invest in building technology. While it has already spread across categories like hatchbacks, SUVs, luxury cars, motor-rickshaws, and regulated taxis, the startup has said that it will further localize the offerings in every market. Another category that is currently in beta mode is Ola Pink, which are cabs driven by women drivers and reserved solely for female passengers in Bangalore. The firm is believed to be hiring an agency to teach women to drive in order for them to become their “driver partners.”

“Our vision is that people shouldn’t find the need to own a car. With increasing smartphone penetration and immense growth in smaller cities and towns, we will be able to drive the benefits of this on-demand platform deeper into the lives of our customers and partners,” said Bhavish Aggarwal, Ola’s co-founder and CEO, in today’s statement.

With this fresh cash, Ola is India’s third best-funded tech venture behind online marketplaces Flipkart and Snapdeal. It will also strengthen its position against global giant Uber. Following the TaxiForSure acquisition, the startup boasted that it is “bigger than Uber in its home country.”